Barry Cupples, Global CEO & James Copley, UK CEO of Talon Outdoor
In a world where all media channels are fully commoditised and standardised, one would expect digital Out of Home (DOOH) to behave and operate in the exact same way as digital online and mobile. The introduction of programmatic trading should therefore be the next logical next step for the DOOH medium. One that will deliver automated, real-time buying, scaled reach, and intelligent, transparent, and frictionless online/offline targeting and measurement. DOOH traded and treated in the same way as other digital media.
There is now a flood of new platforms and providers making forays into the programmatic OOH (PrOOH) space, vying for a slice of a new digital pie. A persistent flow of announcements and press releases continue to stake their claims as first-to-market, DOOH innovators, rejoicing in the new possibilities.
But in the real world, where the distinctiveness of digital OOH is seen as one of the medium’s strengths, the application of online programmatic technologies has not yet sparked a fundamental rethink of the DOOH opportunity on the advertiser or media buying side. Many in the market remain unconvinced that DOOH can ever, or should ever, mimic the same model as online.
This article delves beyond the hype and addresses some of the burning questions that advertisers are asking about programmatic DOOH. The goal is to provide a clearer view of actual capabilities and open issues that still need addressing.
Can programmatic OOH help me to generate campaign scale?
In the UK, OOH generates an estimated 10bn audience impacts each week. The bulk of these impacts come from ‘classic’ inventory i.e. posters and other non-digital billboards. The rest, approximately 21% of impressions, are from digital screens in shopping malls, train stations, London Underground, digital billboards and street furniture. All these can be bought and sold through the existing channels, where specialist OOH agencies like Talon operate.
Media owners have started making some of their inventory available to online media buyers, through a new and emerging channel called ‘programmatic OOH’. There are two basic types of deals available to buyers in PrOOH. One is ‘guaranteed’, where media owners fix the campaign schedule and impression delivery in advance. This is known as a reservation and is effectively identical to a DOOH media buy in the existing channel. The only difference being that the buy is facilitated by AdTech platforms. The other, is ‘non-guaranteed’ where impression delivery is not fixed in advance, giving buyers the ability to adjust campaigns in-flight. The downside of these deals is that buyers can only access unsold inventory.
We estimate that a maximum of 535m impressions are available (in theory), to programmatic buyers through these types of deals. This represents 23% of UK DOOH, or 5% of the total market including classic and digital OOH. In practice, this figure is actually much lower.
For an accurate measure of PrOOH scale, market availability needs to be factored into the equation. That is, how much unsold inventory is typically available after advertisers in the “traditional” channels have optioned their reservations.
Assuming that this figure averages in the region of 50%, then only 270m, or 2.5% of all UK OOH impressions remain available for PrOOH buying.
Who does the “planning” in programmatic OOH?
“Planning” in online programmatic advertising is very different to planning in OOH. Online, it is based on hypotheses about how audiences will respond to ads and then adjusting spend to favour those strategies that perform well and deliver best value-for-money. The planning part happens mostly in-flight.
Planning is a really big thing in Out of Home. People with OOH media and market expertise create customised campaigns to address advertisers' business and marketing goals. Media budgets are often divided across multiple media owners because campaign goals can rarely be achieved with a single provider, environment or format type. Sometimes, OOH planning even recommends which individual ad units should be included in a media buy, based on considerations like price, quality, context and the regulations about which types of advertising messages can appear in which locations.
These planning decisions are often led by deep, data-driven analysis of audience behaviours, using systems designed specifically for the OOH channel like Route and Talon's Ada DMP. In pretty much all cases, they are decisions informed by the experience and performance benchmarks gained from delivering countless OOH campaigns for advertisers of all shapes and sizes.
In PrOOH, digital media buyers skip the planning part altogether. Or more precisely, they outsource campaign planning to media owners. Usually, a single media owner, who offers up the best of their unsold inventory to deliver on the brief. Buyers can't pre-evaluate these impressions as they come through the bid stream. In ‘Guaranteed’ deals, they can’t even refuse them. They are committed to buying them all.
The answer to the question of “who does the planning in programmatic OOH?” is relatively straightforward. If you compare it to how this is currently done in the “traditional” way, then nobody does.